UK finance watchdog head says no plans to push bitcoin regulation
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The head of the UK’s financial regulator has said he currently sees no systemic risk in bitcoin and is not pushing government to make the cryptocurrency part of his remit. Andrew Bailey, the head of the Financial Conduct Authority, repeated calls that investors should be prepared to lose everything if they buy bitcoin, the value of which has spiked upwards from under $1,000 per unit at the start of the year to a high of $17,578 this week. But he told BBC’s Newsnight on Thursday that as long as people understood the risks of what he termed “a very volatile commodity”, he would not press government to legislate that the FCA regulate it. The FCA in general cannot start overseeing new markets without legislation from parliament or Brussels. “I don’t think bitcoin is prevalent enough at the moment to be a systemic threat in the way we experienced during the financial crisis other threats; it needs watching carefully but I don’t think we’re there yet,” said Mr Bailey. “If I thought there was evidence of people saying: ‘You know what I’m going to put my pension into? bitcoin!’ I’d be very concerned, but we don’t see that at the moment.” Mr Bailey rejected bitcoin’s description as a currency, stressing it is a commodity — which the FCA does not regulate. It does, however, oversee instruments underpinned by bitcoin, and has already sounded the alarm over contracts-for-difference that are underpinned by the cryptocurrency. He also conceded during the interview that retail customers could be confused by its label as such. Mr Bailey’s counterparts in the United States on Thursday pledged to be more vigilant about the risks to the system that cryptocurrencies could pose. They also said, however, that at present their impact on financial stability was “likely limited”.
The head of the UK’s financial regulator has said he currently sees no systemic risk in bitcoin and is not pushing government to make the cryptocurrency part of his remit. Andrew Bailey, the head of the Financial Conduct Authority, repeated calls that investors should be prepared to lose everything if they buy bitcoin, the value of which has spiked upwards from under $1,000 per unit at the start of the year to a high of $17,578 this week. But he told BBC’s Newsnight on Thursday that as long as people understood the risks of what he termed “a very volatile commodity”, he would not press government to legislate that the FCA regulate it. The FCA in general cannot start overseeing new markets without legislation from parliament or Brussels. “I don’t think bitcoin is prevalent enough at the moment to be a systemic threat in the way we experienced during the financial crisis other threats; it needs watching carefully but I don’t think we’re there yet,” said Mr Bailey. “If I thought there was evidence of people saying: ‘You know what I’m going to put my pension into? bitcoin!’ I’d be very concerned, but we don’t see that at the moment.” Mr Bailey rejected bitcoin’s description as a currency, stressing it is a commodity — which the FCA does not regulate. It does, however, oversee instruments underpinned by bitcoin, and has already sounded the alarm over contracts-for-difference that are underpinned by the cryptocurrency. He also conceded during the interview that retail customers could be confused by its label as such. Mr Bailey’s counterparts in the United States on Thursday pledged to be more vigilant about the risks to the system that cryptocurrencies could pose. They also said, however, that at present their impact on financial stability was “likely limited”.
